• Are there programs that provide incremental early funding that allow Mittelstand companies to cross the Valley of Death?

• Which programs bring sufficient resources to reach critical mass?

• Which programs allow small firms to gain access to the public procurement process?

In closing, Dr. Wessner suggested that a common challenge for Germany and the United States was to adjust to and help shape the new globalization dynamic. “This may involve initiating change through competitive incentives and major investments. Learning and cooperation are essential for both of our countries.”

Ambassador Wolff asked about the nature of the cooperation between small firms and the Fraunhofer Institutes or federal entities. “Does the government transmit technical assistance? Is the goal for the SME to become a large enterprise, and does that happen? Do they become major competitors, like Qualcomm?” He also asked whether the SBIR program provided only funding or also technical assistance.

Dr. Jäkel said that while the SBIR program is oriented toward mission needs of federal agencies, the German support is oriented to the needs of the companies. “We want to help them bridge the financing gap,” he said. “Banks don’t give enough money for R&D because it’s too risky. We help them cooperate with Fraunhofer, and also research institutions, universities, SMEs, and others. I think it is a good model of how technology and knowledge transfer can succeed.” He said that direct cooperation between an SME and a university facilitates a direct transfer of research to a company. “We want them to grow, but in the end it depends on them. If we look at hidden champions, or global SMEs, they integrate to the region even while half of their employees are abroad. Many have grown from dozens to thousands of employees.”

Dr. Wessner said that in regard to SBIR, it provides no formal technical assistance, but often a program manager can offer valuable information and collect feedback. A number of agencies already provide market training. This is necessary because many of the company leaders are professors, many of whom require help in hiring someone with experience running a company. Helping companies scale up their production and grow remains difficult, and the causes are not always clear.

A questioner asked about the Manufacturing Extension Program in the United States, which helps SMEs acquire new skills, such as lean manufacturing. He asked whether Germany offers a similar service, or whether companies learn from the Fraunhofers.

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